Advantages of the MBO

Advantages of the MBO

Management by the objectives is an important tool. It has certain advantages.

1.       MBO helps and increases employee motivation: because it relates overall goals to the individual's goals; and helps to increase an employee's understanding of where the organization is and where it is heading.

2.       Managers are more likely to complete with themselves than with other managers: this kind of evaluation can reduce internal conflicts that often arise when the managers complete with each other to obtain scarce resources.

3.       MBO results in a "means ends" chain: management at succeeding lower levels in the organization establishes targets which are integrated with those at the next higher level. Thus, it can help insure that everyone's activity is ultimately aimed toward the organizational performance.

4.       MBO provides more objective appraisal criteria: the targets that emerge from the MBO process provide a sound set of criteria for evaluating the manager's performance.

5.       MBO forces and aids in the planning: by forcing top management to establish a strategy and goals for the entire organization, and by requiring other managers to set their targets and plan how to reach them.

6.       MBO identifies problems better and early: frequent performance review sessions make this possible.

7.       MBO identifies performance deficiencies and enables the management and the employees to set individualised self improvement goals and thus proves effective in training and development of people.

8.       MBO helps the individual manager to develop personal leadership, especially the skills of listening, planning, counselling, motivating and evaluating.

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